On July 1, 20X1, CriCo takes out 10%, $10000 note payable that is due on July 1, 20X1. No interest is accrued at year-end 20X0.

If no corrections are made, which of the following statements is correct?

A.) on CriCo's income statement, net income is understated by $500 B.) net income is overstated by $500 C.) on CriCo's balance sheet, retained earnings is understated by $500 D.) on balance sheet, liabilities is overstated by $500